Purplebricks saving claim banned for substantiation failings

Purple Bricks published TV and website advertisements in February 2016.

The TV advert included an agent viewing a client’s property, who stated, “You could save thousands”. The advert also included small print, which stated “Based on average estate agent’s commission – Source: Which? Survey 2011”.

The website advertisement included the claim “£4,158 AVERAGE CUSTOMER SAVING WHEN SELLING”. Next to the headline statement was a circle with an “i” inside, which linked to the statement; “Savings based on Purplebricks average sale price (day one of trading until January 2016) with the UK average commission rate of 1.5% applied. Rates vary”.

One complainant challenged whether:

the claim “You could save thousands” in ad (a) was misleading, given that the substantiation used was more than 5 years old.

the claim “£4,158 average customer saving” in both adverts was misleading and could be substantiated

In response to the complaint, Purplebricks stated that they had taken the national average property price and calculated the value of the commission that could be charged to consumers by a high street estate agent according to the national average commission. They then compared this to the fixed fee that they would charge for the same average property price.

In order to calculate the national average estate agent commission, Purple Bricks used a Which? Survey from 2011 and combined those figures with those provided by a third party (well established) conveyancing firm.

To reach the advertised saving figure of £4,158, Purplebricks used the national average house price (provided by a third party property advertising website) of £303,190.

Complaint 1 – The ASA considered that viewers were likely to understand from the ad that they could save a significant amount of money when selling a property through Purplebricks when compared with a traditional high street estate agent. As such, the ASA chose not to uphold the complaint in respect of the first claim, that; “you could save thousands” as shown in the TV ad.

Complaint 2 – The ASA chose to uphold the second element of the complaint on the basis that the savings figure of £4,158 had not been “adequately substantiated” and was “likely to mislead”. The ASA reached this decision for the following reasons:

The data from a property website which did not show the price at which the properties were sold was not adequate to confirm Purplebricks average sale price.

Purplebricks did not provide any of its sales data to demonstrate their average fee, how it was calculated and whether the higher London rate or any operational fees, were reflected in their saving calculation.

The email from a conveyancing firm and the Which? report were not adequate to confirm that the average commission rate was 1.5% as claimed by Purplebricks.

Why this matters:

This case is important as it shows a scenario where the ASA agreed with the core claims being made (ie that customers would save significant amounts when using Purplebricks as opposed to a high street estate agent), but upheld one of the complaints, on the basis that the substantiation used was “not adequate” as definitive proof. It must be remembered that a claim can be accurate, but still be misleading if the evidence supporting it is not definitive.

The case reinforces the rule that companies must ensure that any data used as substantiation is accurate, up to date and relevant. Here one of the problems seems to have been that the advertiser’s claim was based on their average sale price, but their substantiation related to UK-wide average asking prices. The case is a good reminder of the need to analyse marketing claims carefully and ensure substantiation evidence matches what is being claimed.